Managing rapid urbanisation is essential for improving growth, creating jobs and reducing poverty.

“Nepal’s cities have the potential to drive economic growth to benefit the entire country,” said World Bank country manager for Nepal Tahseen Sayed during a round table on the results of the findings of a study ‘NEPAL: Urban Growth and Spatial Transition: An Initial Assessment’.

With the population of five of Nepal’s 10 largest cities growing at more than four per cent a year, the study revealed that with only 20 per cent of its population living in urban areas, Nepal is the least urbanised country in South Asia. “But Nepal is also one of the fastest urbanising countries in the region, with the urban population growth rate estimated at more than five per cent per year on average since the 1970s,” according to the new study.

“The study will contribute to the government’s programmes for transformative urban development,” said Sayed during the discussion of the study co-financed by AusAid — the international development agency of the Australian government — with the Ministry of Physical Planning and Works.

Nepal’s economy has undergone major structural shifts over the past few decades, from an agriculture economy to a service-based economy. Urban areas are at the centre of this transformation. The urban economy is growing significantly faster than the rural one, and the incidence of poverty more than halved in urban areas from 22 per cent to 15 per cent over 1995-96 — 2010-11,said the study that has also called for tapping into the potential of cities to leverage their comparative advantages in strategic sectors.

“Only vibrant and competitive cities can attract high-return investments and generate the jobs required to accelerate growth while creating a wide range of income-earning opportunities, especially for the poor,” it said, adding Kathmandu is the first area in country to face unprecedented challenges of rapid urbanisation and modernisation due to its position as primary gateway for Nepal’s economic activity.

Population growth is overtaking capacities of existing institutions to manage urbanisation. Land patterns are changing but urban development planning lags behind actual growth. Infrastructure deficits are up and unplanned growth has increased vulnerability to disasters, it said.

“Urgent action is needed to develop and regenerate the Kathmandu metropolis to improve productivity and livability and to ensure that growth is environmentally sustainable and inclusive,” said urban economist at the World Bank and lead author of the report Elisa Muzzini.

source: The Himalayan Times,13 May 2012